Metro cities turn up water rates in name of conservation

How high do water rates have to go to get people to conserve water?

It's a question that Minnetonka and other cities have grappled with since the Legislature required that all metro cities put a conservation rate in place by Jan. 1.

Minnetonka City Council members were wondering about the effectiveness of their conservation rates earlier this month as they decided to again increase water fees, this time by 5 cents per 1,000 gallons for low to moderate users and by 7 to 10 cents for heavier users.

A year ago, Minnetonka moved from a single water rate to tiered rates that go up with usage in an effort to encourage residents to save water.

After limited success in curbing demand, this year consultants recommended raising the tiers again as a greater incentive to conserve.

"People have to realize that it is a resource that is being used quite heavily, and there might come a time when there might not be as much water as we all expect,'' said Public Works Director Brian Wagstrom.

Before approving the higher rates this year, Minnetonka City Council Members Brad Wiersum and Tony Wagner wanted to know whether the change to graduated fees was showing signs of working.

"Have we changed behavior or have we raised revenue?'' Wiersum asked.

In the first year, "We changed behavior slightly, but not to any significance,'' Wagstrom said.

In Minnetonka, nearly 90 percent of households pay the first tier water rate during the winter. That means they use less than 25,000 gallons per quarter. But when lawn sprinklers went on, nearly half of the city's households moved to higher tiers. Some tripled their use.

The rates just adopted by the council range from $1.75 per 1,000 gallons at the lowest tier, for using less than 25,000 gallons per quarter, up to $3.50 per 1,000 gallons at the fourth tier, for using more than 70,000 gallons per quarter.

City Council members asked for a report on this summer's water use before they consider rates again next year. If the higher rates do not reduce water usage, "The question for the council is what should we do about that,'' Wagner said, adding that he would advocate raising rates further if necessary to promote conservation.

But Wiersum said, "I don't think I would want to gouge the public to get them to do what we want them to do.''

Wagstrom said he doesn't think rates are high enough now to "make people second-guess their outside water use,'' but finding the right rate will take study and comparison with other cities that have lowered use.

A question of billing

When the rates are "high and hurtful,'' as they are in California cities, they do work, said Minnetonka Finance Director Merrill King. But her theory is that in Minnetonka, conservation rates won't work until residents get monthly water bills, and because the city bills quarterly, residents don't get them close enough to the time they are using the most water to reduce consumption.

Residents don't get their summer water bills until September, she said, and by then people often don't even remember their summer watering, King said.

"A lot of people call up and say, 'Why is the bill so high?' By then they can't change their behavior, so they are billed at the higher rate.''

If residents got bills monthly and felt the effects of the surcharges, it might prompt them to reduce use the next month, King said.

The city is at least two years away from allowing residents to receive and pay their water bills online, King said. Until that's possible, it would be too expensive for the city to mail water bills monthly, she said.

Why conserve?

Legislators required cities to adopt conservation water rates out of concern for the state's 50-year water supply, said Laurel Reeves, water appropriations manager for the state Department of Natural Resources. The state is concerned that over the long term, the area's deepest aquifer will become depleted unless steps are taken now to curb usage. All cities face the conservation requirement, even though some, like Minneapolis, get their water from rivers rather than the aquifer.

Using tiered water rates is one way to encourage conservation, but their effectiveness depends on how much difference there is between the rates. "If it's a few cents, it may not matter to people,'' Reeves said.

How other cities do it

Elk River is having success with charging significantly higher rates for heavy users, she said. According to the Elk River Municipal Utilities website, the city charges by the month using three tiers: $1.50 per thousand gallons for the first 9,000 gallons of water per month; $3.50 per 1,000 for the next 6,000 gallons, and $4 per 1,000 for anything above 15,000 gallons a month.

Eden Prairie, which started a conservation surcharge in 1998 and a sprinkling ban violation surcharge in 1999, is having success with those measures, said Public Works Director Gene Dietz. The city has two tiers: "We are trying to make watering your grass cost an extra $1 per thousand gallons'' beyond what most people pay for indoor use in the winter, Dietz said.

Sprinkling fines start at $25 and go up to $300 for repeat offenders, and Eden Prairie is tough on enforcement, sending officers out at night to catch violators.

Dietz said he cannot quantify how much these surcharges reduce water usage, but before they were imposed, water use during peak periods could drain city water towers. Now the city is managing to keep up with demand, he said.

"If we had no violation or conservation surcharge, I am confident that the residents of Eden Prairie would drain all of our tanks every day.''

Laurie Blake • 612-673-1711